- NOVA Chemicals is focused on plastics and chemicals with 2,500 employees worldwide. It is owned by IPIC, which aims to be a global polyolefins leader.
- NOVA Chemicals has refinanced some of its near-term debt, extending maturities. As of November 2009, its largest maturities are 2019 and 2016.
- It has access to advantaged ethane feedstocks in North America and proximity to customers in Eastern Canada. While facing near-term challenges, the outlook is positive in the medium to long term as the industry recovers from 2008-2009.
1. NOVA Chemicals
Randy W lf l
R d Woelfel
Chief Executive Officer
Todd Karran
Senior Vice President, Chief Financial Officer and Treasurer
Barclays Capital High Yield Bond
and Syndicated Loan Conference
March 25 2010
25,
2. Forward-Looking Information
This material and the comments made by our management contain forward-looking information with respect to NOVA Chemicals Corporation
alone or together with its subsidiaries and affiliates, depending on the context in which such statements are used. By its nature, forward-looking
information requires us to make assumptions and is subject to inherent risks and uncertainties. There is significant risk that predictions,
forecasts,
forecasts conclusions and projections will not prove to be accurate that our assumptions may not be correct and that actual results may differ
accurate,
materially from such predictions, forecasts, conclusions or projections. We caution you not to place undue reliance on our forward-looking
information as a number of factors could cause actual results, conditions, actions or events to differ materially from the targets, expectations,
estimates or intentions expressed in the forward-looking information. The words “believe,” “expect,” “plan,” “intend,” “estimate,” or “anticipate”
and similar expressions, as well as future or conditional verbs such as “will,” “should,” “would,” and “could” often identify forward-looking
information. Specific forward looking information contained in this material include, among others, statements regarding: IPIC’s vision to be a
g
global polyolefins leader; IPIC’s growth plans; our strategic fit within the IPIC family; reasons to invest in NOVA Chemicals; our competitive
p y g p g y p
advantages; general economic conditions; our structurally advantaged feedstock supply; our beliefs about ethane supply; our beliefs about
feedstock trends and the crude oil to natural gas ratio; our beliefs about regional ethylene cash costs and feedstocks; our expectations
regarding global polyethylene supply/demand and global demand versus global industrial production growth; our expectations and beliefs
regarding polyethylene trade flow and export pricing; and our financing plans and plans for current maturities. With respect to the forward-
looking information, we have made assumptions regarding, among other things: future oil, natural gas, natural gas liquids and benzene prices;
our ability to obtain raw materials; our ability to market products successfully; the impact of increasing competition; and our ability to obtain
financing on acceptable terms Some of our assumptions are based upon internal estimates and analyses of current market conditions and
terms.
trends, management plans and strategies, economic conditions and other factors and are necessarily subject to risks and uncertainties inherent
in projecting future conditions and results. Some of the risks that could affect our future results and could cause results to differ materially from
those expressed include: commodity chemicals price levels (which depend, among other things, on supply and demand for these products,
capacity utilization and substitution rates between these products and competing products); feedstock availability and prices; operating costs;
terms and availability of financing; technology developments; starting up and operating facilities using new technology; realizing synergy and
cost savings targets; our ability to implement our business strategies; meeting time and budget targets for significant capital investments;
g g ; y p g ; g g g g p ;
avoiding unplanned facility shutdowns; safety, health, and environmental risks associated with the operation of chemical plants and marketing of
chemical products, including transportation of these products; public perception of chemicals and chemical end-use products; the impact of
competition; changes in customer demand; changes in, or the introduction of new laws and regulations relating to our business, including
environmental, competition and employment laws; loss of the services of any of our executive officers; uncertainties associated with world
economies; terrorists attacks; severe weather events; and other risks detailed from time to time in our publicly filed disclosure documents and
securities commission reports. Our forward-looking information is expressly qualified in its entirety by this cautionary statement. In addition, the
forward-looking i f
f d l ki information i made only as of th d t of thi material, and except as required b applicable l
ti is d l f the date f this t i l d t i d by li bl law, we undertake no obligation t
d t k bli ti to
update publicly this forward-looking information to reflect new information, subsequent events or otherwise.
1
3. NOVA Chemicals
Overview
NOVA Chemicals is focused on plastics and
chemicals that make everyday life safer
safer,
healthier and easier
Our 2,500 employees develop and manufacture
materials for customers worldwide that produce
consumer, industrial and packaging products
Our innovation and technology create value for
gy
our customers, their products and the markets
they serve
NOVA Chemicals is owned by the International
Petroleum Investment Company (IPIC) of the
Emirate of Abu Dhabi
2
4. NOVA Chemicals
Ownership
International Petroleum Investment Company (IPIC)
IPIC
• A sovereign wealth investment arm of the Government of
the Emirate of Abu Dhabi
• Invested portfolio value approximately $30 billion
• Aa3/AA/AA rated
• Will leverage the expertise of its investments to fulfill it
l th ti f it i t t t f lfill its
vision of becoming a global polyolefins leader
NOVA Chemicals
• IPIC’s first 100% acquisition
• Part of IPIC’s vision of becoming a global polyolefins leader
• Excellent strategic fit
3
5. IPIC Investments
NOVA Chemicals Corporation
NOVA Chemicals Corporation BOREALIS AG (BOREALIS)
BOREALIS AG (BOREALIS) OMV Aktiengesellschaft
OMV Aktiengesellschaft (OMV) Abu Dhabi National Chemicals Co.
Abu Dhabi National Chemicals Co
Petrochemicals Petrochemicals Integrated Oil Chemical Industry
HDQ: Canada HDQ: Austria HDQ: Austria HDQ: Abu Dhabi
Shareholding: 100% Shareholding: 64% Shareholding: 20% Shareholding: 40%
Hyundai Oilbank Co., Ltd. (HDO) Gulf Energy Maritime (GEM) PJSC Pak‐Arab Refinary Ltd. Aabar Investments PJSC
Oil Refining and Marketing Clean Hydrocarbons Shipping Oil Refining / Products Pipeline Investment Company
HDQ: Korea HDQ: UAE HDQ: Pakistan HDQ: Abu Dhabi
Shareholding: 70% Shareholding: 30% Shareholding: 30% Shareholding: 71.23%
Oman Polypropylene LLC Compañia Española De Petroléos, S.A. Cosmo Oil Co., Ltd. Oil Search Limited
Polyolefins Integrated Oil / Petrochemicals Oil Refining and Marketing Oil & Gas – LNG
HDQ: Oman HDQ: Spain HDQ: Japan HDQ: Australia
Shareholding: 20% Shareholding: 47% Shareholding: 20.76% Shareholding: 18%
Energias de Portugal, S.A. MAN Ferrostaal Arab Petroleum Pipeline Company Oasis International Power LLC
Utilities Industrial Services Crude Oil Pipeline Power Utilities
HDQ: Portugal HDQ: Germany HDQ: Egypt HDQ: Abu Dhabi
Shareholding: 4% Shareholding: 70% Shareholding: 15% Shareholding: 18%
4
6. NOVA Chemicals
Business Structure
Performance INEOS NOVA
Olefins/Polyolefins
Styrenics Joint Venture(1)
North American
Ethylene North American EPS Styrene Monomer
and SPS
Styrenic Performance European SPS and
Polyethylene
Resins EPS
Co-products EPS-Based Ventures
2009 R
Revenue: 2009 R
Revenue: Revenue(2):
2009 R
$2.7B U.S. $0.3B U.S. $1.2B U.S.
1. NOVA Chemicals owns 50% of INEOS NOVA
2. NOVA Chemicals’ 50% share. 5
8. Global Polyethylene Demand vs
Global Industrial Production Growth
IP Growth PE Demand (B lb)
8% 200
6% 180
4% 160
140
2%
120
0%
100
-2%
2%
80
-4%
Global IP Growth 60
-6% Global PE Demand 40
-8% 20
-10% 0
20
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
011
990
991
992
993
994
995
996
997
998
999
000
001
002
003
004
005
006
007
008
009
010
012
013
014
Source: ChemSystems, IHS Global Insight, NOVA Chemicals 7
9. Global Polyethylene
Supply and Demand Growth
(billion pounds) (billion pounds)
8.9%
8 9%
16 16
Demand
12 Growth 12
8 8
2.3%
4 4
0 0
-4 -4
-8 -8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
North America Europe Middle East Asia Latin America Other
Source: ChemSystems, CMAI, NOVA Chemicals 8
10. Energy and Feedstock
Crude Oil to Natural Gas Ratio
Crude Oil Ratio, Gas Price
125 20
Crude
C d to G Ratio
Gas R i WTI Crude,
C d Henry H b G
H Hub Gas,
$/bbl $/mmbtu 18
100 16
14
75 12
10
50 8
6
25 4
2
0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: CMAI, Platts, NYMEX, NOVA Chemicals 9
11. Regional Ethylene Cash Costs
and Feedstock Use
cpp North America (2014)
40
35
Heavy
24% Light
30 28
26 76%
20
ROW (2014)
10
3
Light
0 Heavy 38%
Middle East U.S. Ethane Saudi Arabia U.S., Europe, 62%
Ethane Propane Asia Naphtha
Source: CMAI, NOVA Chemicals; Data is from March 2009 through February 2010 10
12. Polyethylene Trade Flow
Europe: Manufacturing
and Sales in Europe
Asia: Manufacturing
U.S. and Canada: and Sales in Asia
Manufacturing and
Sales in North America
and Export to Mexico,
Latin/South America,
Asia and Europe Middle East:
Manufacturing in
The Middle East and
Export to Asia, Europe
and Latin/South America
11
13. NOVA Chemicals
Reasons for Investment
Focused portfolio of products
Oriented to more resilient market segments
Technology platform that fits the markets we choose to serve
Location of assets leads to advantages
Western Canada - Access to advantaged feedstocks
Eastern Canada - Access to diverse sources of feedstock and
proximity to customers
Challenges in the near term, but p
g , positive outlook in medium- to
long-term
Recovery from 2008/2009 on the horizon
Part of a strong global family with goal to be a leader in the industry
12
21. NOVA Chemicals
Adjusted EBITDA
$M
200
100
0
-100
Removal of FX Impact
R l f I
Adjusted EBITDA
-200
-300
-400
Q4'08 Q1'09 Q2'09 Q3'09 Q4'09
Adjusted EBITDA is net income before interest expense, income taxes, depreciation and amortization,
other gains/losses, mark-to-market feedstock derivatives, IPIC transaction costs and restructuring costs. 20
23. NOVA Chemicals
Debt Ratings
Dominion Bond Rating Service Limited(1) BBB (low)
Fitch Ratings Ltd. B+
Moody s
Moody’s Investor Service Ba3
Standard & Poor’s B+
1. The rating is NOVA Chemicals’ senior unsecured debt rating. DBRS has withdrawn the
corporate family debt rating because NOVA Chemicals is now rated investment grade. 22
24. NOVA Chemicals
Summary
Business results i
B i lt improved steadily i 2009 ending
d t dil in 2009, di
with a quarterly net profit
Successful refinancing – including $700M of senior
notes
Focus on meeting our customers’ needs
customers
Part of a larger IPIC family that gives us new
opportunities
23
25. The information contained herein is to our knowledge accurate and reliable as of the date of publication. We extend no warranties and make no representations as
to the accuracy or completeness of the information contained herein, and assume no responsibility regarding the consequences of its use or for any printing errors.
24